Originally published by “Die Mediation: Fachmagazin für Konfliktlösung, Entscheidungsfindung und Kommunikation” (in German)
Conflicts at work are counterproductive and involve huge costs. They annoy customers, employees, and business partners and jeopardize market share. Conflicts can efficiently be solved with mediative approaches. The question is: Which is the best possible approach? From an economic point of view, the transformative approach promises a high level of profitability in the short and long term.
Disputes between individual team members, business units, and corporations are inefficient, because they reduce productivity and innovation. Moreover, these disputes need to be managed, which involves high costs and human resources. Companies with less than 100 employees have calculated the costs of conflict due to failed projects up to €500,000 (KPMG 2009). Therefore, solving conflicts is a decisive factor for any company’s future.
Mediation Explained Simply
Mediation supports systematic conflict resolution. However, not every mediation approach equals one another. There are three different approaches: transformative, evaluative, and facilitative.
The evaluative approach has its roots in juridical circumstances. In this case, the mediator evaluates the different legal positions and offers concrete recommendations to the disputing parties.
The moderating, supportive (facilitative) approach is based on the different interests. The process-leading mediator works with both parties towards a result that is compatible with the various interests. He supports the negotiation.
Transformative mediation, on the contrary, focuses on people, their needs, strengths, and relationships to each other. As a result, the mediator guides the parties through the process and empowers them to develop a cooperative, constructive solution.
The following figure illustrates the different objectives of the three mediation approaches. The transformative mediation is distinguished from the facilitative and evaluative through its systemic approach. Whereas the other two approaches are merely limited to regulating the present conflict. Moreover, the current and future relationships of the involved parties are irrelevant for finding solutions.
The target horizon of the transformative approach is comparatively broad: It is not only about a mutually profitable solution, but also about a long-term positive relationship. Successes, that go beyond the current situation, are achieved by the transformative approach, considering the relationship dynamics.
The transformative approach drives profitability, employee engagement, and customer satisfaction!
Companies can increase their profitability with transformative mediation, by reducing costs and increasing revenue at the same time. The profitability of a company is the ratio of revenue and costs. Customers, managers, teams, and employees have a significant influence on both factors.
Mediation is an important instrument to reduce conflict costs effectively by finding a win-win solution. Additional unilateral solution options, such as "win-lose" or "lose-win", are cost intensive, resource consuming, and competitively damaging. Restoring lost confidence in a business relationship comes at a high cost.
If the customer loses confidence in the company or brand, it negatively affects revenue generation. Disappointed business partners lead to losing both, synergies and high-value orders. Solutions at the expense of employees reduce their engagement, motivation and innovative power, increasing bureaucratic hedging costs, sick leave, fluctuation and the associated loss of know-how for the company.
Even a compromise that appears to be desirable entails costs. A compromise is characterized by both parties making concessions. The result is acceptable for both parties, but not ideal. Although, the costs of the conflict are reduced, the dissatisfaction remains since the initial goals were not fully achieved. As a result, both parties not only question their trust in the joint solution competence, but also the value of their relationship. The future business relationship is subject to an additional trust premium. Yet, the market demands an even higher price for a compromise.
Customers do not want an acceptable solution; they expect the best solution. Compromising with a business partner for the benefit of a merely acceptable solution, quickly costs customers, revenue, and market share.
Accordingly, the transformative approach works towards a win-win solution, while developing a trustworthy relationship for the future. Disagreements between employees, for example, are not only to be settled. Moreover, the aim is to strengthen the collaboration, which enables customers to continue being enthusiastic about innovative solutions.
Loyal customers, motivated employees and strong business relationships are the results of transformative mediation. An increase in return on investment through increasing revenue and reducing costs at the same time, confirms the profitability of the transformative approach.
Turning destructive conflict behavior into trusting cooperation
Especially in terms of processing depth, transformative mediation proves to be particularly effective. Thus, metaphorically speaking, it is not just the visible weeds above ground that are eliminated, but the root of the problem. There is neither a judgment of positions nor a mediation of conflicting interests. An effective solution is achieved by taking the subjacent feelings and needs into account. The mediator highlights the motives and emotions behind the apparent issues in a multi-stage sequential mediation process. This enables both parties to empathize with one another and to understand the needs behind each other’s behavior.
According to the quote by Dr. Wayne Dyner, "If you change the way you look at things, the things you look at change" (quoted from Sturmberg 2019), the perspective on the existing problem changes. This change gradually transforms destructive conflict behavior into trusting cooperation. The opponent becomes an ally. The initial goal of enforcing one's own interests at the expense of the opponent gives way to the intention of finding a mutually profitable solution with your ally.
Empowerment and recognition ensure sustainability – what does this mean?
The strength of the transformative approach is that it creates positive future relationships. Empowerment and recognition enable such a transformation.
Empowerment refers to an intrapersonal change: the mediator empowers and supports a person to achieve inner clarity, tranquility, self-confidence and self-reliance. As a result, the people involved in the mediation gain inner strength and focus.
Recognition, however, transforms the interpersonal relationship: At the beginning, mistrust and self-protection dominate the conflict behavior. Halfway through the process, the participants are able to understand and accept each other' s motives. By the end of the process, both sides are focused on acting autonomously and cooperatively while empathically meeting the needs of the other. In combination, transformative mediation not only transforms the existing conflict behavior at hand, but also shapes future cooperation. Both parties will have confidence in them selves and in the fact that a mutually beneficial solution is possible, should any future tensions arise.
In summary, transformative mediation is the most profitable method for any company seeking sustainable growth of employees, business partners and customers.
Literature
KPMG AG Wirtschaftsprüfungsgesellschaft (2009): Conflict Cost Study – The Costs of Friction Losses in Industrial Companies. Available online at: http://seventools.at/wp-content/uploads/2014/12/KPMG_Konfliktkostenstudie.pdf.
Sturmberg, Joachim P. (2019): If You Change the Way You Look at Things, Things You Look at Change. Max Planck’s Challenge for Health, Healthcare, and the Healthcare System. In: Der. (publ): Embracing Complexity in Health. The Transformation of Science, Practice, and Policy. Cham: Springer, pp. 3 - 44.
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